Tag: ESPN

The Quiet Buying Opportunity

The Walt Disney Company (NYSE:DIS) has quietly retreated from its recent highs of $116 to sub $104 thus presenting a buying opportunity in this media juggernaut heading into earnings. We’ve all heard the endless bickering over its slumping ESPN franchise. Although ESPN makes up a disproportionate amount of the company’s revenue, all of its other franchises are posting healthy growth hence Disney will be relying less and less on its ESPN franchise over the coming years. Disney’s perpetual stock slump leading up to its recent resurgence was almost entirely attributable to the decrease in ESPN subscribers and subsequent revenue and profit declines from that franchise. The ESPN franchise within the Media Networks segment generates revenue/operating income that is disproportionate to the amount of the company’s overall revenue and operating profit. Thus, one can see why investors were spooked after consecutive significant declines in ESPN subscribers and thus financial numbers over the past three years. Excluding ESPN, Disney has been executing well and reporting record numbers throughout all of its other business segments. Disney has a deep and diversified enough entertainment portfolio that makes a compelling case that these ESPN fears are overblown. Disney offers a compelling long-term investment opportunity considering the growth, pipeline, diversity of its portfolio, share repurchase program and dividend growth in light of this recent retreat.

Long-Term Narrative and Positive Analyst Sentiment

I’ve been a long bull of Disney (DIS) stock, particularly since the post-ESPN induced sell-off throughout 2016. Since the lows of October 2016, Disney has seen a huge appreciation in stock price, breaking out to above $116 per share before this current downtrend. This upswing has been on the heels of multiple catalysts such as of reporting record annual results, breaking the all-time worldwide box-office record, witnessing a slew of analyst upgrades, Iger extending his contract as CEO, ESPN woes subsiding, Shanghai Disney opening and Disney’s movie line-up announced through 2020. This inflection point coincided with Doctor Strange, Moana and Star Wars Rouge One in calendar Q4 of 2016 followed by record openings for its live action film, Beauty and the Beast and Guardians of the Galaxy 2. The stock fell from the $120s in late 2015 to the high $80s and had been stuck in the $80-$90 range all throughout 2016. That stock slump offered investors an opportunity to purchase a high-quality company at a significant discount. Continue reading "Disney Quietly Retreats - Buying Opportunity" →

The Media Juggernaut

I’ve been a long bull of The Walt Disney Company (NYSE:DIS) stock, particularly since the post-ESPN induced sell-off in throughout 2016. Since the lows of October 2016, Disney has seen a huge appreciation in stock price, breaking out to above $115 per share level as of late. This upswing has been on the heels of multiple catalysts such as of reporting record annual results, breaking the all-time worldwide box-office record, witnessing a slew of analyst upgrades, Iger extending his contract as CEO, ESPN woes subsiding, Shanghai Disney opening and Disney’s movie line-up announced through 2020. This inflection point coincided with Doctor Strange, Moana and Star Wars Rouge One in Q4 of 2016 followed by a record opening for its live action film, Beauty and the Beast. The stock fell from the $120s in late 2015 to the high $80s and had been stuck in the $80-$90 range all throughout 2016. This perpetual slump was almost entirely attributable to the decrease in ESPN subscribers and subsequent revenue and profit declines from that franchise. The ESPN franchise within the Media Networks segment generates revenue/operating income that is disproportionate to the amount of the company’s overall revenue and operating profit. Thus, one can see why investors were spooked after consecutive significant declines in ESPN subscribers and thus financial numbers over the past three years. Excluding ESPN, Disney has been executing well and reporting record numbers throughout all of its other business segments. Disney has a deep and diversified enough entertainment portfolio that made a compelling case that these ESPN fears were being overblown. Disney offered and still offers a compelling long-term investment opportunity considering the growth, pipeline, diversity of its portfolio, share repurchase program and dividend. Continue reading "Disney: The Media Juggernaut Continues Hot Streak" →

Introduction

Over the previous six months, The Walt Disney Company (NYSE:DIS) has logged a solid 22% gain, moving from ~$92 to ~$113. I’ve been long Disney and wrote several pieces on how the strong fundamentals made a compelling case to buy shares when the stock traded down into the low $90s. The compelling long-term investment opportunity was drawn considering the growth drivers, pipeline, diversity of its portfolio, share repurchase program and dividend. As the first quarter of 2017 comes to an end, Disney continues to deliver strong fundamentals and catalysts moving into the future. At a high-level, Disney’s board has decided to extend Bob Iger’s contract to remain CEO, direct-to-consumer ESPN offerings are in the works, analyst upgrades continue to be issued and Beauty and Beast delivered record breaking numbers to start its film release slate on a strong note for 2017 (Figure 1).

Figure 1 – Six-Month Chart For Disney

Bob Iger Extends Contract

Disney’s Board of Directors announced that it had extended Bob Iger’s contract as Chairman and Chief Executive Officer to July 2, 2019. Bob Iger had been the subject of increasing succession talk after the lead candidate to replace Iger as CEO, Tom Staggs went on to pursue other opportunities and left the company last year. Continue reading "Disney Continues To Deliver - Iger Extends Contract" →